By Rick Hynum | Photos courtesy of Donatos
As a young entrepreneur in the early 1960s, Jim Grote, founder of Columbus, Ohio-based Donatos, was advised to be tough in business and tender at home. He took only half of that supposedly wise counsel to heart—the second part—and still went on to build a pizza empire that’s growing to this day. Now, his daughter, Jane Grote Abell, manages the company with the same firm, steady yet gentle hand. As Donatos’ executive chairwoman, she carries another title that matters just as much to her: chief purpose officer. For Abell, running a business without making a positive social impact is like preaching from the Bible and leaving out Jesus.
“You learn a lot about hospitality when you’re inviting your customers into your home, not just your restaurant. I also thought that was normal. I had no idea that other people didn’t live like that.”
— Jane Grote Abell, Donatos
Not that she’s the preachy type: Like her dad, Abell would rather do good than proselytize about it. And Donatos’ success—the company currently has 430-plus locations in more than half of the U.S. states, with many more in the pipeline—offers lessons that other restaurant corporations would be smart to learn. Abell and the Grote family call it “agape capitalism.” Chat will her for a while, and it’s clear that’s not just some marketing buzzword for Abell. She means it. And she’s very, very good at it.
Growing Up at Donatos
A lot of pizzerias claim to treat their patrons like kin, but Grote, who opened the first Donatos store on the south side of Columbus in 1963, took that idea one step further. As the 1,800-square-foot pizzeria got busier over the next several years, the wait for Grote’s pies got longer. The restaurant had no dining room, but Grote and his growing family lived next door. “So when customers would come for a pizza, he always sent them back to our house to wait,” Abell recalls. “And I give so much credit to my mom, looking back on it now. Every night, she opened up that front door and welcomed our customers in. Our dining room and living room were filled with customers every night waiting for their pizza. My dad would call back and let them know when their pizza was ready, but oftentimes they just stayed and hung out with us.”
For Abell and her three siblings, their living room became a classroom in restaurant management. “You learn a lot about hospitality when you’re inviting your customers into your home, not just your restaurant,” Abell reflects. “I also thought that was normal. I had no idea that other people didn’t live like that.”
Abell fondly remembers the light from the Donatos sign casting a reddish glow in her bedroom every night. She also remembers that, from the start, her dad had big ambitions for Donatos, despite his humble—and homey—approach to entrepreneurship. “At nighttime, my dad would come get us, and he’d take us out in our pajamas and stand under that big sign. He would talk about growing Donatos all over. He never went into business just wanting to have one pizza shop. He was always about growth. He always said, ‘We’re going to be around the world one day.’ But he never said, ‘And we’re going to have an exit strategy’ or ‘We’re going to make this or that amount of money.’ Wherever we did business, we would bring our principles to work with us, and we were going to give back to the community.”
“We came up with a promise for all of our stores and associates to live by. And our promise is really simple: It’s to serve the best pizza and make someone’s day better.”
— Jane Grote Abell, Donatos
Before opening Donatos at 19, Grote had worked for other restaurateurs, including two partners with very different management styles. “One gentleman served the same pizza consistently every single night,” Abell says. “He took care of his customers, the community and his associates, and my dad saw at an early age that those nights were busier. But when the other gentleman was working, he took toppings off the pizza or watered down the sauce to get more pizzas out of it, and my dad saw those nights were slower.”
That wasn’t how Grote, as a customer, wanted to be treated. And he took the Golden Rule seriously. It’s the core philosophy of Donatos, a Latin word that means “to give a good thing.”
“That’s the principle he founded the business on,” Abell says. “He would talk about bringing his principles to work with him and making sure you treated others the way you wanted to be treated. His older mentors would say, ‘You can’t do that. You can’t bring those goody-two-shoes principles to work. You’re in business, and you have to get the other guy before he gets you.’ But he knew that wasn’t how he wanted to do business.”
Doing the Right Thing
Over time, true to Grote’s vision, Donatos grew from that one little store into a Midwest colossus without ever sacrificing its core values. Meanwhile, more family members joined the fold, including Grote’s four children, plus their mother, grandfather, uncles and cousins. As a student at Ohio State, Abell worked in the campus location, then went full-time and became Donatos’ chief people officer (she didn’t much care for corporate jargon like “human resources”).
By 1990, Donatos had launched its franchise program, and things really took off. The family chose their franchisees carefully, always with an eye toward giving back to every community with a Donatos location. “There are a lot of people out there with money, but that’s not who we’re looking for,” Abell says. “Yes, they need to have money. But we’re really looking for people who are aligned with our values, our purpose, our mission and what we stand for. So we’re pretty particular about who we bring on board, because franchise agreements sometimes last longer than marriages. It’s important that we’re picking the right people to grow with us.”
“We turned down the [$8.2 million PPP] loan, because the spirit of the law was about making sure it was granted to the people that were struggling and unable to make rent or pay their people.”
— Jane Grote Abell, Donatos
For Donatos, the right people are those who want to “lead with love” rather than just make a boatload of money. But do that right, Abell believes, and the money will come. The concept is even embedded in the company’s mission statement: “Our mission is to promote goodwill through our products and service, principles and people.”
“We built that into our performance reviews,” Abell says. “We built it into all the things that we do. But we also recognized that it’s difficult to explain that to the 16-year-old working in a restaurant. So we came up with a promise for all of our stores and associates to live by. And our promise is really simple: It’s to serve the best pizza and make someone’s day better.”
Abell quotes an old Jimi Hendrix song: “When the power of love overcomes the love of power, the world will know peace.” Thus, Donatos abides by three tenets: Treat others the way you want to be treated. Always lead with love. And do the right thing.
As an example of doing the right thing, Abell points to the pandemic era and Donatos’ opportunity to receive a Paycheck Protection Program (PPP) loan. “Stepping into the pandemic, none of us had any idea what was going to happen,” she says. “And the first few weeks, like the rest of the world, our sales declined significantly. So we applied for the PPP loan and were approved for $8.2 million. Then, a couple of weeks into it, our sales started rebounding, like a lot of pizza places. So we called an emergency board meeting, and under agape capitalism, we looked at the spirit and the letter of the law for that loan. And we ended up turning down the loan, because the spirit of the law was about making sure it was granted to the people that were struggling and unable to make rent or pay their people. Since our sales rebounded, even though we weren’t sure what was going to happen the rest of the year…we felt like the right thing was to turn down the loan.”
That turned out to be a “great year” for Donatos, Abell says. “Of course, it’s never easy to turn down $8 million, being so unsure what the future holds, but we believed it was the right thing to do. And, to this day, I still believe it was the right thing to do.”
Detour at McDonald’s
As with any company, there have been bumps on the road to Donatos’ expansion. There was also a sudden, unexpected detour. When McDonald’s offered to buy the company in 1999, Grote and his family weren’t even looking to sell. “But there were a lot of pros,” Abell says. “They’re the largest restaurant company and know what they’re doing. They have done it already, and they have access to capital to grow quicker than we probably could have at the time. So we decided to sell.”
With that partnership, Grote’s dream of global growth came true, as the first Donatos opened in Germany. The company also expanded beyond the Midwest, into cities like Philadelphia and Atlanta. But it was also morphing into an entirely different sort of behemoth. “We had grown to nearly 200 restaurants, but we were building buildings faster than our people, which is a hard thing,” Abell says. “You have to keep developing your people as you develop your buildings….We started [turning] into something that we weren’t [supposed to be]. We had larger restaurants, 2,800 square feet, with dining rooms. All of a sudden, we had front-of-the-house, back-of-the-house, and much more of a casual-dining feel. That was a culture shift for us, because we are much more about pickup and delivery. We have some dining rooms and party rooms, but not full service. Our sales/investment ratio was upside-down. And we were investing way more in the buildings—we were up to $1.5 million on a build-out, and that’s an upside-down model.”
“Moms, dads, aunts, uncles and grandparents can come in [to the Reeb Center] and get access to services to help them find a job while their kids are either in the Learning Center or the Boys & Girls Club.”
— Jane Grote Abell, Donatos
Then, one day in 2003, Abell was driving to work when she heard a news report on NPR: McDonald’s was planning to either sell or close all of its Donatos locations. She and her dad seized the chance to buy the company back and rebuild it their way. “We were losing a lot of money, so we needed to restructure and get focused on basics again,” she says. “And that’s what we did. We had to leave a couple of markets, because we didn’t have the infrastructure to continue to support them, including Germany. But we retrenched and had a great turnaround. We rebounded. We had a $10.5 million turnaround that first year and then started growing again.”
A Hub of Hope
And that new growth came in innovative ways. Today, Donatos has locations in 27 states, including 248 nested in Red Robin burger restaurants. That relationship started in 2018, meaning Donatos was a ghost brand before ghost brands became the “next big thing.”
“I didn’t know a lot about Red Robin until they approached us, but everything they talked about—their purpose and their values—aligned with us,” Abell says. “They talk about love, about the heart of the house. They take care of their people and the community. They truly are a great partner. [The Donatos locations] increased sales for them at their end—I think it was 8% the last time I heard. So the Red Robins with Donatos locations have seen a basis point improvement. It’s been a success for us and for them. I think growth through venues like that is the future, although we still are going to do traditional stores.”
Abell has other ideas for the future of business, too. Which brings us back to agape capitalism.
Abell took over her dad’s role as president of Donatos in 2007 and replaced him as chair of the board in 2010. In addition to spearheading all of that growth through Red Robin and adding more traditional stores to the lineup, Abell took on the new role of Donatos’ chief purpose officer with zeal. Columbus’ south side, where the first Donatos store opened 60 years ago, had fallen on hard times. Manufacturing businesses had abandoned the area, taking good-paying jobs with them. The mayor asked Abell and Grote for help.
“One in four houses were boarded up, and 70% of the population lived at 200% below the poverty rate,” Abell says. “Kids between the ages of 16 and 26 were not in school, not working, didn’t have their GED. There was high drug trafficking, high human trafficking, high gang activity, and a lot of violence in that neighborhood.”
Working with local officials, business leaders and nonprofits, Abell and her friend, Tanny Crane, helped found the Reeb Center in a former elementary school building and set about revitalizing the area. The facility houses 10 nonprofits that offer everything from adult education and workforce development programs to early childhood care, mental and behavioral healthcare, GED and hospitality courses, and statewide certification for nursing.
The latter, Abell says, is a six-week course for nursing assistants. “And then, literally down the street, they can get a job at Nationwide Children’s Hospital.” The Reeb Center’s partners have also trained locals for jobs at Grant Medical Center in Columbus. “There are three different jobs in the hospital system that have high turnover, so we focused on those and helped train people to be employed at Grant, which has been great.”
Abell has seen firsthand the difference the Reeb Center—which she calls a “hub of hope”—has made in the community. “We offer an education for infants and toddlers all the way up through high school with the Boys & Girls Club and even as adults. Moms, dads, aunts, uncles and grandparents can come in and get access to services to help them find a job while their kids are either in the Learning Center or the Boys & Girls Club….We have a café there, too. They’re walking around, they’re talking, they’re engaging with people, and you can truly see the transformation in people just being there and getting the programming that they need.”
In March 2022, Abell, Grote and their family launched the Donatos Family Foundation to focus on three pillars—housing, hunger and health—in the communities that Donatos serves. The foundation devotes a specific time period to raising funds for each pillar every year, starting this year with Habitat for Humanity. Donatos itself also hires the formerly incarcerated, giving them a chance to rebuild their lives.
For Abell and her family—most of whom have leadership roles at Donatos—doing business through the power of love is the only way to do business. It always has been. But they’re also riding a surging wave of consumer interest in companies that do real good in the world, whether through traditional business models or social entrepreneurship.
“I think we’ve all seen that…in these last couple of years, with the pandemic and so much social upheaval,” Abell says. “And it’s not just the next generation that’s looking for authentic companies, but it’s the overall consumer. They want to do business with people that they can trust and that have an authentic story. And I think people can see through [contrived] authenticity, when companies sometimes create a story because it’s important to have that story, versus it’s just authentically us at Donatos. It’s authentically who we have been for the last 60 years in doing business.”